Juan Rodriguez v. Bank of America

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

November 22, 2011

JUAN RODRIGUEZ,PLAINTIFFS,v.BANK OF AMERICA, ORGANIZED AND EXISTING (RE: DOCKET NO. 5) UNDER LAWS OF THE UNITED STATES, RECONTRUST COMPANY, N.A., ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF TEXAS,DEFENDANTS.

The opinion of the court was delivered by: Paul S. Grewal United States Magistrate Judge

United States District Court For the Northern District of California

ORDER GRANTING MOTION TO DISMISS

In this action challenging the pending foreclosure on his home, pro se plaintiff Juan Rodriguez ("Rodriguez") alleges that Defendants Bank of America and Recontrust Company, N.A. 21 ("Defendants") did not comply with a number of requirements related to the Deed of Trust and 22 Note. Rodriguez seeks quiet title, injunctive relief, and declaratory relief. 23

On September 8, 2011, Defendants moved to dismiss all claims pursuant to Fed. R. Civ. P. 12(b)(6). A hearing on Defendants' motion was set for October 18, 2011. Under Civ. L.R. 7-3, Rodriguez had to submit his opposition, or statement of non-opposition, to Defendants' motion 26 within fourteen days, or by September 22, 2011. Rodriguez did not file any such document by the 27 deadline. On October 4, 2011, Defendants filed a notice with the court that Rodriguez had not 28 opposed their motion. As a result, the court vacated the October 18 hearing date and took Defendants' motion under submission based solely on the moving papers. As of this date, 2 Rodriguez has not filed any response to Defendants' motion to dismiss. Having considered 3

Defendants' briefs and for the reasons below, the court concludes that dismissal is warranted, but 4 without prejudice and with leave to amend. 5

I.LEGAL STANDARD

A. Dismissal for Failure to Oppose a Motion

Failure to follow a district court's local rules is a proper ground for dismissal.*fn1 In 8 considering dismissal, the district court must weigh five factors: "'(1) the public interest in 9 expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of 10 prejudice to the defendants; (4) the public policy favoring disposition of cases on their merits; and 11 (5) the availability of less drastic sanctions.'"*fn2

In this district, the failure to oppose a motion 12 pending before the court within the time allotted by the local rules may result in the imposition of 13 sanctions, including dismissal of the case.*fn3

B. Dismissal under Fed. R. Civ. P. 12(b)(6)

Pursuant to Rule 12(b)(6), a complaint may be dismissed against a
defendant for failure to
16 state a claim upon which relief may be granted against that
defendant. A complaint must have 17 sufficient factual allegations to
"state a claim to relief that is plausible on its face."*fn4
A claim is 18 facially plausible "when the pleaded factual
content allows the court to draw the reasonable 19 inference that the
defendant is liable for the misconduct alleged."*fn5

When evaluating a Rule 12(b)(6) motion, the court must accept all material allegations in 2 the complaint as true and construe them in the light most favorable to the non-moving party. The 3 court is not required to accept "legal conclusions cast in the form of factual allegations if those 4 conclusions cannot reasonably be drawn from the facts alleged." Further, the court need not accept 5 as true allegations that contradict matters that are either subject to judicial notice or attached as 6 exhibits to the complaint. 7

Pro se complaints are held to "less stringent standards than formal pleadings drafted by 8 lawyers."*fn6 The court "has an obligation to construe the pleadings liberally and to afford the 9 [plaintiff] the benefit of any doubt".*fn7 "However, pro se pleadings must still allege facts sufficient to 10 allow a reviewing court to determine whether a claim has been stated."*fn8 "Dismissal with prejudice and without leave to amend is not appropriate unless it is clear . that the complaint could not be saved by amendment."*fn9

II.DISCUSSION

A. Dismissal for Failure to Oppose Defendants' Motion

The court recognizes that Rodriguez is proceeding in pro se and does not have the benefit of an attorney to guide him through the litigation. Rodriguez nevertheless is bound by the federal 17 rules as well as all local rules.*fn10 Under the civil local rules and Ninth Circuit precedent, 18 Rodriguez's failure to oppose Defendants' motion may subject him to the sanction of dismissal of 19 his claims.*fn11 Dismissal with prejudice at this stage, however, would be a drastic sanction and contrary to the public policy favoring disposition of a case on its merits.*fn12 The court will therefore 2 review Defendants' arguments on the merits of Rodriguez's claims. By reviewing the adequacy of 3 the complaint, the court furthers the public interest in resolution of litigation, allows the case to 4 move forward should Rodriguez choose to amend his complaint, and minimizes prejudice to 5 Defendants by considering their arguments for dismissal on the merits.*fn13

B. Dismissal With Leave to Amend Pursuant to Rule 12(b)(6)

Defendants argues that the complaint challenging a foreclosure action on Rodriguez's home 8 fails because he has not alleged tender of the amount owed on the loan. Defendants further argue 9 that Rodriguez fails to allege any facts in support of his claim that Defendants lack standing to 10 foreclose on the property and for declaratory and injunctive relief. Viewing the facts alleged in a light most favorable to Rodriguez, the court nevertheless agrees that Rodriguez has failed to state a claim upon which relief may be granted.*fn14

1.Defendants' Standing to Foreclose

Rodriguez alleges that Defendants lack standing to foreclose because they do not have 15 possession of and have not produced the original promissory Note or the original Deed of Trust.*fn15

These allegations are insufficient to support Rodriguez's argument that Defendants lack standing. 17

"California law does not require possession of the note as a precondition to non-judicial foreclosure 18 under a Deed of Trust."*fn16 Non-judicial foreclosure proceedings may be initiated by "the trustee, 19 mortgagee, or beneficiary, or any of their authorized agents" pursuant to Cal. Civ. Code § 2924(a). 20

Rodriguez further alleges that Defendants lack standing because Defendants engaged in a process to "hide the true identity of the successive Beneficiaries when and as the alleged 'loan' (Deed of 2 Trust) was sold," such that the named "Nominee Beneficiary" is not the actual beneficiary.*fn17

Courts have uniformly rejected this allegation as a basis for lack of standing.*fn18 The court therefore 4 finds that Rodriguez has failed to allege sufficient facts to support his claim that Defendants lack 5 standing. 6

Defendants argue that Rodriguez's complaint also fails as a matter of
law because he does 8 not allege tender of the undisputed obligation
in full.*fn19 According to Defendants, the "tender
rule" 9 extends to any claim that is "implicitly integrated" with the
foreclosure sale, affecting all of 10
California courts have explained the rationale behind the tender rule
as one arising in
equity: "Equity will not interpose its remedial power in the
accomplishment of what seemingly 13 would be nothing but an idly and
expensively futile act."*fn20 There is some division
in the district 14 courts, however, as to whether the "tender rule"
precludes a claimant from seeking to prevent a 15 pending non-judicial
foreclosure, as opposed to attempting to "unwind" a foreclosure that
has taken 16 place. For example, in Silva-Pearson v. BAC Home Loans
Servicing, LP, the court found no basis 17 for the "tender rule" where
plaintiff challenges a pending foreclosure, as opposed to the 18
commonly-cited line of cases requiring a plaintiff to allege tender to
set aside a foreclosure that has 19 been completed.*fn21
Other courts do not make this distinction. For example, in
Yazdanpanah v.
2.Rodriguez's Failure to State a Claim for Relief for Wrongful
Foreclosure
Rodriguez's claims.

Sacramento Valley Mortgage Group, the court dismissed plaintiff's claim in part because "[w]hen 2 a debtor is in default of a home mortgage loan, and a foreclosure is either pending or has taken 3 place, the debtor must allege a credible tender of the amount of the secure debt to maintain any 4 cause of action for wrongful foreclosure."*fn22

According to Defendants, the foreclosure on Rodriguez's home has not yet occurred.*fn23

Rodriguez does not allege that he can or will tender payment of the full principal owed on the loan. 7

Unlike an action to set aside a foreclosure, in which the basis becomes valid and proper "once the 8 trustor fails to effectively exercise his right to redeem,"*fn24 it is possible that a plaintiff preemptively 9 seeking to postpone or prevent foreclosure may be able to allege facts sufficient to impose a 10 temporary restraining order or preliminary injunction against foreclosure. But that is not the case 11

Defendants do not have standing to enforce the here. Other than his general allegations that 12 foreclosure, addressed above, and more general allegations regarding Defendants' "wrongful 13 conduct" and the invalidity of Note underlying the Deed of Trust, discussed below, Rodriguez does 14 cite any legal basis for his claim seeking to prevent the wrongful foreclosure of the loan to his 15 home.

3. Support of Claims for Declaratory and Rodriguez's Failure to Allege Facts in Injunctive Relief

Rodriguez's first, second and third causes of action pray for declaratory and injunctive relief. Yet Rodriguez has failed to allege any facts sufficient to sustain these causes of action. 19

For declaratory relief, Rodriguez merely alleges that an actual
controversy exists regarding
the rights and duties of the parties surrounding the Note and Deed
of Trust. Rodriguez asks the 21 court for a "judicial determination
and declaration of Plaintiff's and Defendants' respective rights 22
and duties."*fn25 Defendants argue that Rodriguez's
request is duplicative of his claim for quiet title. 23

Defendants rely on California case law for the proposition that declaratory relief is intended "to afford a new form of relief where needed and not to furnish a litigant with a second cause of action 2 for the determination of identical issues."*fn26 Because the rights and responsibilities of each party 3 would necessarily be considered and resolved through a quiet title action, Defendants contend that 4

Under federal law, the court may issue a declaratory judgment even
where another remedy
is available.*fn27 However, courts generally deny
declaratory relief if another remedy is found to be 7 more
appropriate.*fn28 Here, Rodriguez does not state
whether he is bringing this action under 28

Rodriguez's cause of action for declaratory relief must fail.

U.S.C. § 2201 and does not allege any facts to suggest that the actual controversy he points to 9 would not be appropriately resolved by a ruling on the merits of his claims for quiet title and 10 injunctive relief. Because a determination on Rodriguez's third cause of action would be an

appropriate means to resolve the rights and duties of the parties with respect to the Note and Deed

of Trust, the court must dismiss Rodriguez's first cause of action for declaratory relief. 13

As above, the conclusory statements in Rodriguez's complaint are insufficient to maintain these 15 causes of action. Injunctive relief under federal law requires Rodriguez to satisfy a four-factor test 16 and demonstrate that he (1) suffers irreparable injury, (2) has no adequate remedy at law, (3) the 17 balance of hardships weighs in his favor, and (4) the effect on the public interest supports an 18 injunction.*fn29 But Rodriguez merely asserts bare-bone, conclusory statements regarding the "wrongful conduct of Defendants," the "irreparable harm" that foreclosure would cause him if he 2 loses his home, and the "inherently unique" nature of real property that presumably supports the 3 claim for an equitable remedy.*fn30

Rodriguez also seeks injunctive relief, and cancellation of the Deed of Trust and quiet title.

Rodriguez's third cause of action for "cancellation of instrument/ foreclosure/ quiet title" appears to be an action for quiet title. As Defendants note, this would require Rodriguez to plead 6 that there are claims adverse to the title against which a determination is sought.*fn31

However, Rodriguez does not allege that Defendants have established a claim to title over the property, but 8 only that there is a deficiency in the Deed of Trust that renders it unenforceable.*fn32 These are the 9 same allegations underlying Rodriguez's general claim that Defendants do not have standing to 10 foreclose on the home. Without additional facts alleged as to Rodriguez's title to the property and any adverse claims that have been made to the title, Rodriguez cannot maintain a cause of action for quiet title. 13

Because the court "has an obligation to construe the pleadings liberally and to afford the [pro se plaintiff] the benefit of any doubt,"*fn33 the court will grant Rodriguez leave to amend his 15 complaint. Rodriguez should bear in mind the elements required for any claims asserted and that 16 the facts alleged must be sufficient to allow the court to draw a reasonable inference that 17 Defendants are liable. Should Rodriguez fail to file an amended complaint in a timely manner, the 18 court will entertain a renewed motion to dismiss with prejudice for lack of prosecution.

III.CONCLUSION

For the foregoing reasons, Defendants' motion to dismiss is granted, with leave to amend.

Any amended complaint shall be filed no later than December 14, 2011.

IT IS SO ORDERED.

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